Seeking Alpha: Cameron's Parting Shot Before The Deluge

"There's a storm comin'; You'd better run." Richard Hawley, There's A Storm a Comin'

Maybe the nicest thing to be said by oil/gas equipment company Cameron (NYSE:CAM) is that it has finally managed to get its house in order … right as a hurricane bears down on the sector. If investors are worried about the exposure of companies like Dover (NYSE:DOV) and Honeywell (NYSE:HON) to oil and gas production companies, you can probably imagine the concern for the equipment manufacturers like Cameron, National Oilwell Varco (NYSE:NOV), and FMC Technologies (NYSE:FTI).

Cameron serves customers across a range of markets and their exposures to oil/gas prices are not all the same. With that, the company is going to be delivering revenue out of its backlog in 2015 and likely doing so at decent margins. Offsetting that is the risk that the cycle could drop even further before reaching bottom and could take away Cameron's ability to grow earnings for two or more years. It's probably too early to start dumpster-diving (unless you expect a significant turnaround in oil prices over the next six to twelve months), but if you've held on to Cameron shares at this point, the best strategy may be to ride it out as the company has been gaining share in unconventional drilling and can still drive meaningful long-term value out of its OneSubsea JV with Schlumberger (NYSE:SLB).


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Cameron's Parting Shot Before The Deluge